Optimum Exits Workshop – Vancouver

This was a specially designed Optimum Exits workshop presented to Acetech in Vancouver, December 9, 2010.

Acetech is a is a not-for-profit organization by CEOs for CEOs of operating companies innovating with technology who want to improve their performance.

Key Points from Part 1 – Exits are the Best Part

  • I believe exits are the best part of being an entrepreneur or investor
  • It’s when we get paid for all of our hard work and risk capital
  • But it’s also the least well understood part of being an shareholder
  • Simply because it doesn’t happen very often
  • Our goal is to provide the information to help you execute better exits

Key Points from Part 2 – Exit Strategy

  • The most important element in the business plan
  • It does not need to be complicated
  • There are only two essential elements – when and how much
  • It’s critically important to check the alignment
  • Vesting is a powerful tool to create and maintain alignment
  • The Equity Effect
  • A focus on exits is healthy

Key Points from Part 3 – Financing Your Company

  • Financing is easy – exiting is hard
  • Why exit strategy has to come first
  • Startup economics have changed
  • Why it costs so little today
  • Who actually finances startups
  • Are VCs ever a good idea?
  • Angels can finance to $5 to 10 million

Key Points from Part 4 – How Early Can You Sell?

  • You don’t need to be profitable to sell
  • As soon as you prove the model may be the optimum time
  • Exiting in internet time
  • Dont Ride It Over the Top!
  • This is a golden era for entrepreneurs and angels

Key Points from Part 5 – Planning Your Exit

  • Companies should be sold, not bought
  • The steps to completing an exit
  • To Dos before contacting buyers
  • Unsolicited offers are rarely good news for the shareholders

Key Points from Part 6 – Your Valuation

  • I have a bookshelf of books on valuation that I never read
  • Valuation is based on fundamentals and comparables
  • A simple way to think about it
  • The effect of growth on your multiple
  • Market factors
  • Shares vs assets
  • Please don’t pay for a valuation

Key Points from Part 7 – Exit Timing

  • The biggest question is often “How long?”
  • The short answer is 6 to 18 months
  • When to tell the team
  • The sales collateral
  • The sales funnel
  • The bidding process
  • Negotiating and closing
  • CEO deal fatigue

Key Points from Part 8 – Your Exit Team

  • The ideal exit team
  • Why the CEO should not lead
  • Selecting your M&A advisor

Key Points from Part 9 – Maximizing Value

  • Building shareholder value
  • Plan to over-achieve
  • Five ways to maximize your value
  • Can you really get 50% more?

Key Points from Part 10 – Closing and Life Strategies

  • Representations and warranties
  • We need more exits
  • Exits are an underused life strategy
  • Exit early – exit often

The PowerPoint for this talk is online here.

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